Is estate planning only for older workers?
An attorney that focuses on estate planning would answer with a resounding no. As a preliminary matter, the range of estate planning options can be utilized even for individuals in the early stages of their lives.
Like financial planners, an attorney that focuses on estate planning will also recommend that even young workers can start planning for their financial needs in retirement, as well as end-of-life expenses and their legacy to heirs and loved ones. The reason is simple: Retirement savings plans, like a 401(k) or IRA, are assets. As such, they will be included in an estate’s valuation.
Yet young workers may want the flexibility to accommodate potential life events like marriage or divorce. A revocable trust is an option that can provide flexibility and assurance during a grantor’s life. Unlike a will, a revocable trust does not have to go through probate, where probate pleadings usually become a matter of public court records. Unless a legal challenge is brought to the validity of the revocable trust, the successor trustee simply takes control upon the grantor’s death. Yet while the grantor is alive, he or she retains complete control over the trust’s assets.
A revocable trust can also specify how the grantor would like to be cared for in the event that he or she is no longer able to make decisions. Sometimes called a revocable living trust, the instructions can include medical decisions as well as financial instructions for the care of the grantor’s estate.
In fact, a revocable trust can even be used to set up other types of trusts, such as a testamentary trust for minor children. Although a will can also be used to create a testamentary trust, the revocable trust route avoids the oversight of the probate court. A testamentary trust is also an effective strategy for avoiding court involvement when IRA or 401(k) account beneficiaries are minors.
For more information, check out our firm’s estates and trusts page.